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Cleveland-Cliffs Completes Acquisition of Stelco Holdings Inc.
Stelco Holdings Inc. (TSX: STLC) (“ Stelco ” or the “ Company ”) today announced that Cleveland-Cliffs Inc. (“ Cliffs ”) has completed its previously announced acquisition of Stelco (the “ Arrangement ”) pursuant to a plan of arrangement involving the Company, Cliffs, and 13421422 Canada Inc. (the “ Purchaser ”), a wholly owned subsidiary of Cliffs.
Alan Kestenbaum, Executive Chairman and Chief Executive Officer of Stelco, stated: “Over the past seven years, since the acquisition of the Company, we have worked tirelessly with all of our stakeholders – our customers, our suppliers, the United Steelworkers, all of our valued employees and investors who believed in us – to restore Stelco as a North American leader in the steel industry and an iconic Canadian company. I am extremely proud of our track record of identifying and executing on operational improvements and competitiveness, resulting in industry-leading Adjusted EBITDA Margins that enabled us to pay $1 billion in dividends while buying back over $1.2 billion of shares. This has been capped off by completing this sale at a 300% premium to our IPO price resulting in a compound annual growth rate of 32%. Cliffs, led by industry leader Lourenco Goncalves, has made it clear both in words and in practice, that they share many of the core values that have led to Stelco’s recent success, and I am confident that the strong legacy of Stelco, our partners and our employees are in very good and strong hands going forward.”
About Stelco Holdings Inc.
Stelco is a low cost, integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America. Stelco produces flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled steel products, as well as pig iron and metallurgical coke. With first-rate gauge, crown, and shape control, as well as uniform through-coil mechanical properties, our steel products are supplied to customers in the construction, automotive, energy, appliance, and pipe and tube industries across Canada and the United States as well as to a variety of steel service centres, which are distributors of steel products. At Stelco, we understand the importance of our business reflecting the communities we serve and are committed to diversity and inclusion as a core part of our workplace culture, in part, through active participation in the BlackNorth Initiative.
Early Warning Reporting
Immediately prior to the effective date of the transaction, Cliffs and its subsidiaries did not own any common shares (“ Stelco Shares ”) of the Company. Under the terms of the Arrangement, the Purchaser, acquired each of the issued and outstanding Stelco Shares for C$60.00 and 0.454 of a share of common stock, $0.125 par value per share, of Cliffs (each whole share, a “ Cliffs Share ”). The aggregate consideration delivered to holders of Stelco Shares pursuant to the Arrangement for Stelco Shares (including cash payments in lieu of fractional Cliffs Shares) was C$3,266,903,282.85 and 24,719,568 Cliffs Shares. The closing trading price of a Cliffs Share on the New York Stock Exchange on October 31, 2024, the date prior to the effective date of the Arrangement, was US$12.98 (approximately C$18.06).
An early warning report will be filed on SEDAR+ at www.sedarplus.com under Stelco’s profile. In order to obtain a copy of the early warning report, please contact Cliffs’ Secretary at: (800) 214-0739.
The Stelco Shares will be delisted from the Toronto Stock Exchange and Stelco has applied to cease to be a reporting issuer in Canada. The Toronto Stock Exchange will disseminate a notice announcing the delisting of Stelco Shares in due course.
Cliffs will become a reporting issuer in all of the provinces and territories of Canada by virtue of the completion of the Arrangement.
Non-IFRS Measures
This press release refers to certain non-IFRS measures that are not recognized under International Financial Reporting Standards (" IFRS "), do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures including “Adjusted EBITDA,” to provide supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management uses these non-IFRS financial measures to facilitate operating performance comparisons from period-to-period, to prepare annual operating budgets and forecasts, and drive performance through our management compensation program. For a definition of these non-IFRS measures, refer to the Company’s MD&A for the three and six months ended June 30, 2024 available under the Company’s profile on SEDAR+ at www.sedarplus.ca .
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